Contract Form

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Types of Contracts

• Oral contracts are contracts that parties do not write down
• Written contracts are contracts that may have been negotiated verbally, but are then written down
  • Both oral and written contracts can be legally binding and enforceable

Pros of Written Contracts

• why written contracts are best:
  • Proof
    • easier for a person to prove the existence of a written contract
  • Terms
    • easier for a person to prove the terms of a written contract
  • Precision
    • requires the parties to be more precise in defining their relationship
  • Clarity
    • written contract is more likely to have terms that clarify what happens if a contract relationship fails

Statute of Frauds

• Some types of contracts must be written down and the contracting parties must sign them
  • must be written down to prevent fraud between the contracting parties, according to a rule called the Statute of Frauds
  • E.g., contracts for the sale of land must be written down
• law does not specify how contracts must be written down
  • exchanged text messages can be sufficient to demonstrate proof of a contract

Essential Elements of a Contract

For any contract to be legally enforceable, it must include:

• Capacity: Parties must have the legal ability to enter into a contract (e.g., not minors or mentally incapacitated).
• Legality: The subject matter of the contract must be legal and not violate public policy.
• Mutual Assent: Both parties must demonstrate their intention to enter into a specific agreement with clear terms through an “offer” and “acceptance.